How Can Real Property Be Transferred and Avoid Probate?

Assembly Bill 139 was approved by the Governor and filed with the Secretary of State on September 21, 2015. The law allows a Transfer on Death Deed (“TOD”) to be created as of September 15, 2015. The law expires, or sunsets, on January 1, 2021.

As a Certified Probate Real Estate Specialist and probate broker I continue to be surprised by the number of people who pass away without a Will and/or a Trust. The reasons people do not create a Will and/or Trust are as varied as the people. Some feel the cost associated with hiring an attorney is too much. My professional opinion is that for most people, their home is their largest asset. We protect that asset with insurance yet so many people do not protect their largest assets from probate.

Having worked as a probate and estate planning paralegal for several top San Jose and Silicon Valley law firms, perhaps I may have a better handle on probate and the probate process than others might have.

As with most things in life “one size does not fit all”. The size of one’s estate certainly comes into play with estate planning. That of course is the job of a probate and estate planning attorney.

A transfer on death deed may be a good option to transfer real property and avoid probate.

Revocable Transfer on Death Deeds

The law creates the revocable transfer on death deed. The TOD deed transfers real property to the named beneficiary upon the owner’s death without a probate proceeding. Property that may be transferred via a TOD include residential one to four properties, condominiums, and single tract agricultural land with 40 acres or less that is improved with a single family residence.

Existing law provides many methods for a person to pass real property upon death to a beneficiary. Such methods include titling the property in joint tenancy, by trust, by will, community property with right of survivorship, intestate succession, and others.

Probate Avoidance

Through January 1, 2021, the law allows for the transfer of real property on the death of the owner without the need for probate proceedings. As with all matters involving the transfer of real property there are specified rules that must be followed.

Signed, dated and acknowledged before a Notary Public

Must be recorded within 60 days after it is executed

It does not affect ownership rights during the owner’s life

For Medi-Cal reimbursement and eligibility purposes it is considered part of the owner’s estate

The TOD can be revoked at any time and has no effect until the person who created the TOD dies. There are three ways to revoke the deed:

Sell the property, transfer the property to a trust, or give away the property before ones death and record the deed.

Record a new notarized TOD.

Record a notarized revocation of the deed. There is a statutory form for this.

The deed includes a 24 question FAQ that explains the many facets of the TOD as well as other issues affecting transfer of real property upon death.

A Will cannot revoke a Transfer on Death deed.

A Transfer on Death deed may be the perfect solution for some homeowners to avoid probate of real property. Consult with an attorney to get your estate planning in order before it is too late. The time and money you spend today may save your estate tens of thousands of dollars. If you do not know an attorney that can assist you we are happy to recommend one who can.

This post is for general information purposes only. Always consult with a legal and/or tax professional. Read our disclaimer. If you need a recommendation for tax and/or legal help we are happy to connect you with trusted tax and legal professionals.

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